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enraged_camel posted:So. A lot of people like Vanguard because of low fees. All their funds have a $3,000 minimum except for their STAR fund, however. I'd decide on what you want to invest in and then choose a company. Both companies should have the common index funds, so you should be able to build a similar portfolio in either.
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Sep 8, 2008 01:03
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Little Tortilla Boy posted:Bump...anyone? I think Schwab and T Rowe Price might both have low minimums. You cannot really diversify with a small initial investment, so you will not see a lot of specific advice. I would personally save up $1,000 and buy Vanguard's STAR Fund (VGSTX), which is a mix of other Vanguard Bond/Equity funds with a $1,000 minimum. Then, when you've accumulated $3,000, transfer it to another investment vehicle such as Target Retirement.
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Sep 24, 2008 17:09
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Lord Kimbo posted:I am currently planning on what I will be doing for my 2009 Roth IRA contributions and wondering if I should put anything towards items of intrinsic value? I was thinking about putting something small (< 10%) of my retirement into either gold, or land to help further diversify my portfolio. Currently I have my retirement funds spread out over several mutual funds focusing in domestic growth and foreign markets. Is this something I should be focusing on or would putting on a tinfoil hat suffice instead? It's up to you. A lot of people like holding some "real" assets in their portfolio, whether it is commodities or real estate. I have 10% invested in Vanguard's REIT Index (VGSIX). REITs hold a portfolio of income producing real-estate, and are required to pay out 90% of their income (rent) as dividends to shareholders. You should be aware that a lot of funds have exposure to REITs and commodities, so by owning them your portfolio already has some of one or both. IIRC Vanguard Total Stock Market Index (VTSMX) has around 0.88% REIT holdings. Edit: VTSMX actually holds 2.003% REIT. See http://www.bogleheads.org/wiki/index.php/Percentages_of_REITs_Present_in_Vanguard_Index_Funds for data on other Vanguard fund holdings as of 30 June 2008. var1ety fucked around with this message at 18:58 on Sep 24, 2008 |
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Sep 24, 2008 18:04
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KS posted:I thought the prevailing wisdom was that the target retirement funds weren't so hot. Looking at Vanguard's, the 2045 retirement fund has 10+% of its assets in bonds. Isn't that a bit conservative? At least the expense ratio is low, and it is essentially just like putting 70+% of your money into an index fund, but I can't help thinking there are better options. TR gives you a diversified portfolio with a $3,000 initial investment that rebalances over time to reduce its risk without you having to do anything. You really need at least $9,000 to build a balanced portfolio on your own (33% domestic, 33% international, 33% bonds), and if you want to refine by regions (Pacific/European/Emerging) you need more like $30,000. Bonds provide stability and reduced risk to a portfolio without greatly impacting returns. I am in agreement with 80k that, even as a young person, you should have at minimum 10% exposure to low risk bonds in your portfolio. I personally hold 20% bonds. If your personal investment strategy calls for no bonds then you should look at Vanguard's Total World Stock Index (VTWSX). Edit: Meant VTWSX, not Total International. See posts below discussing it. var1ety fucked around with this message at 19:11 on Sep 24, 2008 |
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Sep 24, 2008 18:50
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Aggro Craig posted:Here's what I was thinking for my portfolio. How does it look? And when I go to the branch office, do I just bring this in and tell them that's what I want my money in? Can I combine my 2008 and 2009 IRAs or do they need to be seperate? I'm not sure how buying funds through Scottrade works, but buying these funds directly from Vanguard requires a $3000 minimum per fund. So, to have 10% in VBMFX you would need $30,000 in your account. You could buy ETF equivalents to get around this, but trading fees can be expensive. With your $10,000 opening deposit you could split VTSMX/VBMFX/VGTSX equally. You could also consider the Vanguard Target Retirement funds. The 2050 fund is roughly 72% US (VTSMX), 10% Bond (VBMFX), 18% International.
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Jan 12, 2009 20:35
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Aggro Craig posted:Thanks for the info. I guess I'll roll both my international and domestic into toal funds. One last question, I'm tempted to allocate more towards bonds to make sure I don't get burned. Is this being overly conservative or a good way to mitigate the risk? VTSMX has declined 35% in the past year, so you would have been rewarded for holding additional bonds for that time period. However, nobody knows what the ideal asset allocation will be going forward, so your 40/40/20 has just as much of a chance of being it as a 33/33/33 split, or a 45/45/10 split. If you are young it kind of doesn't matter. Future contributions are going to make up the bulk of your portfolio. But in the end you should allocate in a way that allows you to sleep at night without worrying about it and without being tempted to move the money around too frequently.
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Jan 12, 2009 21:01
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pr0zac posted:I've finally got enough money coming in to start investing in my retirement. I just moved $5k for 2008 into a Vanguard Roth IRA and was hoping for suggestions on a good starting setup. Right now I've got all $5k sitting in Target Retirement 2040 (VFORX) but it seems like the general consensus around here is those aren't the best investment? What would be the best place to start? The best place to start is building an asset allocation plan by reading some of the books in the OP. With a small initial amount of money your hands are tied. You can get exposure to a diversified portfolio of asset classes through the TR fund with a single $3000 minimum, or you can buy ETF equivalents to build your own portfolio. With the ETF route you will need to pay brokerage fees on any trade. With the fund route you cannot influence your asset allocation to any great degree, but it will auto-rebalance and become more conservative over time. Make sure you turn on electronic delivery of statements to avoid the $20/year fee using Vanguard funds.
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Jan 22, 2009 19:25
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Killmaster posted:Should I rollover my 401k? To convert a 401k to a Roth IRA you first need to convert it to a traditional IRA. You could choose to leave it there and continue to defer taxes until withdrawal in lieu of converting to a Roth. You could also choose to convert only part of the balance. On top of paying income taxes on the amount converted to a Roth IRA you also raise your AGI, which can exclude you from some tax credits. After the conversion you would be selling low and buying low. Ideally you would invest in similar asset classes in your converted IRA to maintain your desired asset allocation. There's a good chance the funds you're invested in are proxies for the S&P 500. Unless you have stellar funds with low expense ratios that you don't want to lose I think it's always worth it to convert. International funds usually suck in the 401k so you're forced to overweight your portfolio with domestic bonds and equity.
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May 7, 2009 21:38
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El Kabong posted:Any advice? I kinda got skipped over last page and I hope it wasn't because there is no good answer It depends on whether the money is in an IRA or a taxable account as well as your individual investment strategy. For me personally I have a desired asset allocation (x% bonds, y% domestic stocks, z% international stocks), and I rebalance if they are more than a few percent out of kilter with one another. I have a mix of IRA and taxable assets, but am only actively contributing to my IRAs, so I do my best to do this rebalancing entirely inside of my IRAs so I do not generate additional tax implications. I do this about once a month. You will need to consider transaction fees on either side of your sale in addition to tax (if appropriate) to determine if selling is practicable. If your account balance is not very high then you could eat up a lot of your gains just through these transaction fees. I do not personally hold ETFs in my portfolio, but I understand that they are only more efficient than a traditional mutual fund in the case that you have free trades or that you trade very infrequently. Timing the market is very risky since it could just as easily go up as down. The best we can do is try to maintain our desired asset allocation and hope for the best over the long haul.
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May 12, 2009 22:07
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theDoubleH posted:Does the $3000 minimum at Vanguard apply to the entire account, or to the individual funds? If it's the latter, does that mean I need $20k+ to have a properly diversified portfolio? I have ~ $2k (split about 50/50 between PREIX and PEXMX - not at all diversified, I know) in a T Rowe Price account, and I plan to contribute enough per month, starting in August, to max out a Roth IRA this year (including the $2k). I'd like to open it with Vanguard, but is that feasible? Should I just open it with T Rowe Price and transfer it to Vanguard in a few years? The minimum is per fund, so you need a decent chunk of cash to diversify. For a lot of people Vanguard's Target Retirement funds are a good fit as they provide a blend of international/domestic equity and bonds in a single fund. Recently they also opened Vanguard Total World Stock Index (VTWSX) which might be appropriate for a simple bond/equity mix - you'll still need $6,000 to do a 50/50 split, however.
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Jun 27, 2009 17:30
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SecretFire posted:Here's an asset allocation I was thinking of. I'm canadian, so obviously that changes things a bit. You might want to consider paring your portfolio down to 2-4 tickers if you can, unless you have a decent sized starting portfolio or free trades. Otherwise it will be very hard to rebalance or contribute new money without spending a lot of money on transaction fees. I do not personally hold any ETFs in my portfolio, so maybe a person that does can add some advice.
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Jul 11, 2009 03:38
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SecretFire posted:Hmm, I had that thought after looking at it. It's not that I'm nuts about ETFs, it's that aside from a couple of TD canada funds, there really isn't a lot of low-cost stuff available that isn't exchange-traded. Bogleheads (a community focused on portfolio management via low-cost index investing) have a sister wiki focusing on Canada called Finiki. Here's a link to its Portfolio Design and Construction page: http://www.finiki.org/index.php?title=Portfolio_Design_and_Construction The portfolios both on that page and on linked pages are really similar to the one you constructed, except they do not hold USO or Emerging Markets as a separate asset class, and they hold only one Bond fund. You can also consider that VTI is made up of 12.3% Energy companies already, so you may not need or want to have additional exposure to US Oil. The Canadian Business designed Couch Potato Portfolio (linked on that page) recommends using ETFs if you are going to invest one time per year, otherwise they recommend TD eFunds for traditional mutual fund equivalents.
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Jul 11, 2009 14:27
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xgalaxy posted:For someone (age 27) with approx. 10k invested (through Vanguard) should I avoid the emerging markets fund? Right now I just have all of my money in the Target Retirement but was thinking of splitting it up between a few funds. I had heard the emerging markets fund was pretty good, if not a risky, but this was about a year ago. With things the way they are should I avoid this fund? Minimum investment in most Vanguard funds is $3,000, so with $10,000 available it will be hard to split your money without over exposing yourself. Putting 30% of your money into EM is very risky. If you're invested in the 2050 retirement then you already have 3.9% invested in them (https://institutional.vanguard.com/VGApp/iip/site/institutional/investments/aggregateviews?cl=00000103).
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Aug 11, 2009 03:06
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il serpente cosmico posted:Some quick questions now that I have my Roth IRA going. My mutual funds pay dividends. My bond fund pays monthly, and my target retirement fund pays annually. These dividends will be reinvested. Will I need to claim this dividends on my tax return as capital gains? Secondly, I hear dollar cost averaging is your friend when contributing to mutual funds. I'm a little fuzzy on the math--it seems to me it's good for mitigating risk, but I don't see any other benefits. You do not have to worry about dividends in an IRA. If you were getting them in a taxable account your mutual fund company would send you a 1099-DIV around tax time with some numbers to plug into your tax return. There is no special treatment of reinvesting dividends in a taxable account - you would still owe taxes on them as with normal dividends. Dollar cost averaging lessens both the upside and downside of an investment. Here's a page that compares lump sum and dollar cost averaging: http://www.bogleheads.org/wiki/Lump_sum_vs_DCA Bogleheads posted:For a completely rational investor, lump sum investing will always produce a higher expected return, because it immediately moves your funds from asset classes with lower expected returns to ones with higher expected returns. Note that higher expected returns do not guarantee that your actual returns will be higher.
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Aug 18, 2009 19:24
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bobwhoops posted:I'm looking to start investing for the first time. I'm a grad student so there's no employer matched 401k for me, so I was thinking about opening a Roth IRA. Is vanguard still a good place to do this? I looked at some of the funds they offered and I wouldn't even know where to begin picking. Any suggestions? Vanguard is what many people use, but it has high minimums ($1,000 for the STAR fund, $3,000 for most other funds). T. Rowe Price lets you start funding a Roth IRA with as little as $50/month on an automatic investment plan, although it accesses a $10 annual fee for accounts with less than $5,000. A lot of people find Retirement Funds to be a good fit since they give you a diversified, auto-rebalancing portfolio with a single fund to manage. This is especially true when you are just beginning to fund an account, since you cannot diversify well with the high fund minimum investments. If you need the money in the next 5 years you should keep your equity allocation low. The books in the OP will give you a better idea about your risk tolerance and what makes sense for your personal situation. I have read and recommend The Bogleheads' Guide to Investing to new investors in addition to The Four Pillars of Investing - check your local library, they might have copies of one or both.
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Oct 20, 2009 16:19
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Leperflesh posted:Without going into my asset allocation (having just read this thread I conclude I am in too many funds (8 in my main 401k and another 6 in an old 401k to which I no longer contribute), I'm interested in opinions on VIEIX specifically, and funds that track the S&P "completion" index more generally. Well, a naive look at VFINX (S&P 500) compared to VEXMX (Extended market) has VEXMX returning 49% compared to 23% for VFINX for the past year, so over-weighting during that time period would have yielded extra returns. I personally try and approximate the total US market by holding a weighted amount of VEXMX in a Roth IRA to complement my 401k's S&P 500 fund.
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Jan 8, 2010 17:18
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Leperflesh posted:I don't, and won't, try to do this kind of market timing; I'll lose in the long run. That said: what weighting ratio are you going with, between your S&P 500 fund and VEXMX? For my domestic equity I am holding 80% S&P 500, 20% VEXMX. The URL that follows lists S&P 500 as 79.90% and Wilshire 4500 as 20.1%, so that should be pretty close. https://personal.vanguard.com/us/FundsWorldMarket
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Jan 8, 2010 21:32
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waffle posted:I'm going to open a Roth IRA, and I really like the Vanguard funds, but I don't know that I'll easily obtain enough money to have money in more than one fund for a while. I want to go ahead and get started, and Schwab has some good low expense ratio index funds--just not as many as I'd like, into the future. Will it be hard to switch companies, say, 5 years from now? I don't have any experience with switching companies, but if you have $3000 you can open a Target Retirement fund at Vanguard that approximates your investing goals and hold that until you have enough to diversify further; these funds have the further benefit of re-balancing themselves automatically.
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Jan 28, 2010 15:38
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Panthrax posted:I've got ~$1300 in a Roth with State Farm in their target retirement plan thing. I just got a letter saying they're upping the yearly fee to $40. It's pretty lovely anyway (and expensive), so I guess it's time to go somewhere else. I see Vanguard only has the STAR fund that can start at under 3 grand. Is that decent? Should I look somewhere else to put my $1300? I'll probably start contributing to it again, I stopped a long time ago. Any suggestions? I think Vanguard's STAR fund is a good place to park your money until you meet the minimums for a Target Retirement fund. It's an auto re-balancing bucket of a whole bunch of Equity and Fixed Income securities, has low fees, and when your account is just starting out I do not think it's worth the headache to try and diversify just for a few extra dollars of return a year. Make sure that you sign up for electronic delivery of statements to avoid the annual $20 fee from Vanguard for low balance accounts.
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Feb 17, 2010 17:41
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ixo posted:Does anyone have any opinions on dividend reinvestment, both in tax-sheltered and non tax-sheltered accounts? If I plan on holding something like a utility or index fund for a long term (5-10 years or more), what are the upsides/downsides to DRIP'ing (not with the company directly, but through the broker)? Automatically reinvesting dividends in a taxable fund makes specific share identification for capital gains / losses reporting a pain in the rear end (because of more frequent transactions). I do automatically reinvest on the IRA side, however.
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Mar 3, 2010 03:18
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Spandrels posted:I was looking at my 401(k) lately as part of a new investing kick and I discovered I probably need to rebalance my investments there, right now it is: It's a personal choice, but you should have some bonds to add stability to your account. I use Bogle's guidelines of Bonds = Age for myself, and I split the equity portion 60% Domestic / 40% International / 10% REIT.
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Mar 10, 2010 20:14
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Spandrels posted:i'm not familiar with boigle's guidelines but some quick googling suggest that i should have a percentage of my 401(k) dictated by my age, so im 27, i should have 27% bonds, right? Yes, that is a good place to start, and if you decide your risk tolerance is higher or lower you can skew the number either direction.
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Mar 10, 2010 23:25
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Crazak P posted:I'll stick with the plan of putting $5k in my roth and $5k towards my student loans this year. What's your investment plan (X% equity, Y% bond - equity split into A% domestic and B% international)? Once you figure that out you just have to balance out your contributions against your holdings.
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Mar 25, 2010 20:46
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Crazak P posted:Since I want to make my contribution for 2009 and April 15 is coming up soon, I wanted to know if I would be better off putting my money in an index fund vs the retirement fund. I would personally keep my money in the retirement fund just to have the diversified bucket of domestic/foreign index funds with bonds mixed in. Otherwise, you could be exposing yourself to more equity risk then you actually mean to take.
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Mar 26, 2010 18:15
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Favorabilis Solitud posted:I was able to go in and cancel the election change. That is a common sense point I overlooked. Back to the drawing board. How does the matching vest? If it's immediate you might be able to beat transaction fees by selling the stock as soon as you get it and transferring the proceeds into another fund. Free money is free money, after all.
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Mar 31, 2010 19:10
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NJ Deac posted:I have an old 401k from a previous employer with approximately $5,000 in it. I am trying to decide if I should roll this money over into my new 401k, or take the tax hit and roll it into my Roth IRA. Given the fact that I am relatively young (27) and the Roth is so much more flexible in addition to growing tax free, my inclination is to take the tax hit and roll it into the Roth, but are there any other considerations I am missing when making this decision? You could also roll it into a self-directed, traditional IRA. Most people are unhappy with the high costs and lack of diversity in their 401k plan account, and this would let you get access to other options. The general rule of thumb is that Roth IRA conversions are worth it only if you can afford to pay the taxes with new money.
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Apr 28, 2010 18:55
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KingFisher posted:Maybe I am being pretty blind here but i don't see any dividends listed on: There was a dividend issued on March 29, 2010 according to Google Finance.
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May 4, 2010 00:15
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Mind_Taker posted:I assume there is no reason at all I shouldn't transfer everything from my investor shares to admiral shares, correct? Minimum balances might keep you from re-balancing your accounts if you would dip below the minimum. Once you're in the fund, however, market fluctuations won't kick you out. In any case, Vanguard is going to automatically upgrade all your Investor shares to the Admiral equivalent in the coming months. You can have the process done in five minutes if you call and speak to a representative. Per Vanguard, switching from Investor to Admiral is a nontaxable event.
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Oct 6, 2010 21:17
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bam thwok posted:Bizarre question; is there any means by which I can contribute a portion of a yearly bonus to my company's 401k for the tax advantage? Ours has always gone in at the 401k election rate, so if yours doesn't it must be up to the company / plan administrator / payroll.
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Oct 15, 2010 18:13
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Lyon posted:I understand this, but does it make more sense to open up a personal IRA instead because there's no matching? The general wisdom is to contribute to retirement accounts in the following order: 1. 401k to match 2. Roth IRA to limit ($5,000) 3. 401k to limit ($16,500) 4. Taxable investments There are income limits of roughly $100,000 on Roth IRA contributions and your own situation can vary blah blah blah.
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Oct 28, 2010 13:57
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Pissingintowind posted:Anyone? I'm looking to make a purchase as early as today! 1. Which domestic fund is better choice, Total Market, or S&P500? I'm leaning towards S&P500. Personal choice. I hold the Total Market so I get exposure to all the companies the S&P 500 excludes. 2. Should I be using funds or ETFs? I'm leaning towards ETFs. Although buying and selling Vanguard ETFs is now commission free, you incur a $20 annual fee until you have $50,000 in assets. If you want to hold individual funds (as opposed to a Total Retirement fund, which includes Bonds as well), ETFs are your only way to do this until your account balance grows, so you have to decide if paying this fee is worth it. 3. What distribution ratio should I be doing for Domestic/Europe/Pacific/Emerging Markets? I'm leaning towards 40/30/20/10. Personal choice, but with your target distribution you should consider Vanguard Total World Stock Index Fund Investor Shares (VTWSX). It has those asset categories split into 44/27/14/16 and would let you manage a single fund without needing a large IRA balance. Alternatively, if you had a high enough balance you could hold 60% Vanguard Total International Stock Index Fund (VGTSX) you would have 15% Emerging, 29% Europe, 15% Pacific and get your Domestic from VTSMX until you meet Admiral fund requirements. I don't think this is different enough from VTWSX to make it worth it, though, unless VGTSX gets an Admiral version before VTWSX.
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Nov 5, 2010 17:28
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Let's talk about Roth 401k accounts. My work is offering them next year, but the more I read about them, the more it seems like they're a bad idea for most situations. Here is a concise article that talks about reasons not to use one (and cases where you would want to): http://thefinancebuff.com/2008/03/case-against-roth-401k.html It talks about a few points -
The article was written in 2008. One thing that I believe has changed since then is that there is now a conversion path from a Roth 401k to a Roth IRA. To those people who are funding a Roth 401k, what made you decide it made financial sense for you?
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Nov 12, 2010 23:22
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moflika posted:I'm 25, have no income for 2010 (was studying abroad and backpacking) You must have taxable compensation to contribute to an IRA. http://www.irs.gov/publications/p590/ch01.html#en_US_publink1000230352
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Dec 14, 2010 02:00
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Roth IRAs use after tax money, so filing or not does not matter. You do no annual accounting on them unless you make a withdrawal.
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Jan 25, 2011 19:49
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Edawg06 posted:Quick question, and if it's been discussed 1,000 times before I apologize but I didn't see anything in the OP. The minimum on Vanguard Target Retirement funds recently shrunk to $1,000, so you might be better served by waiting until you can meet this and skip the transfer fee you would incur moving from another institution.
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May 22, 2011 23:42
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Gay Nudist Dad posted:So what's the suggestion regarding Roth 401(k)s? I just became eligible for 401k at my new job (my first 401k! a grownup!) and I'm not sure how I should contribute. Roth 401(k) accounts are a bad deal for most people. Here's a page that makes a good case for sticking with the traditional 401(k) - http://thefinancebuff.com/case-against-roth-401k.html Roth IRAs are a great deal because they are self directed, have relatively high phase-out limits (traditional IRAs start to phase out at 56k while Roth IRAs start at 105k), and have no required minimum distributions. Roth 401(k)s enjoy few advantages over their traditional brethren beyond prepaying taxes, which is a dubious advantage in the absence of a defined benefit pension plan since it takes quite a lot of cash to fill in those lower brackets in retirement, while you will be prepaying at your current marginal rate.
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Aug 8, 2011 20:37
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The six new Vanguard Admiral funds announced three months ago became available yesterday -quote:Vanguard Developed Markets Index Fund Existing investments will be converted automatically later this year, but you can do it now by calling or logging into the website and clicking a convert link on the right side of your fund holdings. Source
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Sep 28, 2011 14:25
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